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RIO DE JANEIRO (Reuters) - FIFA and the Brazilian government dismissed suggestions on Monday that next year's World Cup will be staged at the cost of health and education as they hit back at criticism at the cost of the event.

"None of the money earmarked for health and education has been diverted to the building of World Cup stadiums," Brazil's sports minister Aldo Rebelo told reporters.

FIFA secretary general Jerome Valcke added: "FIFA is not making four billion reais (1.14 billion pounds) to run away in a big Mercedes Benz.

"We are using our money to develop football and we are one of the most transparent sporting organisations in the world."

A wave of nationwide protests have alarmed organisers of the Confederations Cup, a dry run for next year's event which is currently taking place in Brazil and features world champions Spain, Uruguay, Italy and Mexico among the eight teams.

The protests, sparked by a rise in public transport fares, have been about the dismal state of public services, high taxes and corruption. Some have been dispersed by police firing tear gas and rubber bullets in what many feel has been a disproportionate response.

Demonstrators are also angry at the amount of public money spent on the 12 World Cup stadiums, especially after guarantees in 2007 that they would be privately financed.

Former Brazil forward Romario, now a Congressman, has been among the most vocal, high profile critics, complaining that FIFA set up a "state within a state" and is the "real president" of the country.

Both FIFA and Brazilian officials were at pains to point out that the World Cup generated jobs and investments in infrastructure.

Rebelo said the government's budget for health and education this year was 177 billion reais.

"The sports ministry's budget is one percent of that and includes money spent on the World Cup," he said, adding that 24,500 direct jobs been created in Brazil at the six Confederations Cup stadiums including construction, engineering, telecommunications."

NEW INFRASTRUCTURE

Deputy sports minister Luis Fernandes said the staging of the World Cup had brought forward the building of new infrastructure which was needed in any case.

"The World Cup and Confederations Cup represent an historic opportunity to promote the development of the country," he said. "It has brought forward investments which would have to have been made regardless of the World Cup and the Confederations Cup.

Valcke then spoke about FIFA, which in Brazil is seen as milking the profits from the World Cup without investing anything itself.

"People think we come in, we enjoy the country and run away, without paying tax or creating anything," said Valcke.

But he said FIFA would have costs of around 1.5 billion reais to host the event, including accommodation for all the 32 participating teams.

"I'm not ashamed of what we're going, we're doing good things for Brazil," he said.

Valcke said that FIFA was a "non-profit" organisation which ploughed money back into the development of football worldwide."

"We have 20 competitions in a four-year cycle and the World Cup is the only one of them which make money," he said. "We have duties, responsibilities, programmes we are supporting."

FIFA's head of communications Walter de Gregorio said the protests had put soccer's governing body in a difficult situation.

"If we don't say anything, we are criticised for being only interested in football. If we make any comments, we are criticised because it's seen as interference of the situation in Brazil," he said.

"The perception abroad is the country is under fire and there is a civil war, this is not the case."